NK-4 (tinman) and NK-3 (bap) encode homeodomain transcription factors that are required for the development of the Drosophila mesoderm, including heart. While NK-3 act as a strong transcriptional repressor, NK-4 can act either as a transcriptional activator or a repressor. NK-4-dependent transactivation is augmented by the p300 coactivator, and p300 physically interacts with NK-4, which provides the first evidence that the homeodomain transcription factor recruits the p300 coactivator for its transactivation function. For repressor activity of NK-3, both the homeodomain and the carboxy-terminal region are required. Transgenic flies haboring gene cassettes that produce mRNAs for various NK-4 and NK-3 domains were generated, and muscle patterns were examined by immnuostaining of embryos in order to address the in vivo function of NK-4 and NK-3 in mesoderm patterning. Ectopic expression of NK-4 throughout mesoderm causes mild disruption of somatic muscle development, whereas expression of NK-3 cause strong disruption of somatic, visceral and cardiac muscle development, suggesting different roles of NK-4 and NK-3 in mesoderm patterning. In vitro, NK-4 interacts with the mesodermal determinant Twist in a Tinman domain-dependent manner, and NK-3 interacts with NK-4 and with other mesodermal gene products. These results indicate that, depending on a combination of these transcription factors, target genes of NK-3 and NK-4 can be selected, thereby specifying the fates of mesodermal cells.